"Apple Will Sell 50 Million iPads A Year"

We had hedge-fund manager Jeff Matthews of RAM Partners on
TechTicker the other day (Jeff writes Jeff
Matthews Is Not Making This Up, an excellent finance and
investing blog).

We got to talking about Apple, and Jeff tossed out a startling
prediction for Apple's iPad business:

Apple, Jeff said, will soon sell 50 million iPads a year.

Given the amazing start the device has had, this forecast is
hardly wild: 4 million iPads have been sold already, and ~12
million should be sold this year. So selling 50 million in
a couple of years doesn't sound like a stretch, especially if the
price comes down.

Given the waves the iPad has made already, this scenario seems
even more likely. (Yes, there will be competition,
especially from Android-based tablets. But this market is
wide-open enough that we expect Apple to be able to maintain
strong growth for at least a few years.)

So how much revenue would Apple generate if/when it sells 50
million iPads a year?

The current ASP (average selling price) for the product is
somewhere in the ~$650 range. Over the next couple of
years, the ASP will likely drop significantly, perhaps to the
~$400 range.

50 million units at $400 apiece would be $20 billion of
revenue. That compares to Apple's ~$60 billion of revenue
today.

(For what it's worth, in our first
post on the iPad, we predicted that the company would
eventually sell 100 million units a year at $199 apiece, for the
same $20 billion of revenue. Maybe it will be 100 million at
$400...)